SpaceX provides a spectacle while Tesla delays frustrate

Transcript

[MUSIC PLAYING]

It isn't often that a tech entrepreneur can get a head start measured in years in an entirely new market. And it's even rarer to happen in two markets at the same time. But how do you build and fund businesses in entirely new industries like this? Well, this is the challenge that has been facing Elon Musk. And this week it's come into sharp relief. SpaceX, his private space company, launched the Falcon Heavy, which is the first of a new generation of giant rocket. And its well ahead of the competition.

Now this has been funded on the classic venture capital model to the tune of $1.6 billion. But it's also benefited from having Nasa and the US military as customers. For them the ability to fund a new business by buying slots on smaller rockets has been a much more attractive way of creating a new rocket programme than handing out very expensive government contracts.

Contrast that with Mr Musk's other venture. Tesla also got a huge head start last summer when it launched the Model 3, a mass market electric car that can do more than 200 miles. Musk funded Tesla in the stock market, and he's benefited from a gravity-defying share price, which has helped him tap the market for money to fund these ambitions. But production on the Model 3 is running six months behind schedule, and it's not clear when Tesla will be able to catch up. But even if he can conquer space, he won't be able to hold back time.

Tesla's lead is eroding. It's now nearly two years since people lined up in the street just for the privilege of joining a waiting list for the Model 3, something that costs $1,000. And they're likely to wait quite a lot longer. Meanwhile, the massive volatility that has crashed back into the stock market this week is a sign that the days are drawing to an end when Mr Musk could count on his soaring share price to see him through.